Q&A-Tackling Spain's power tariff deficit

MADRID Oct 26 (Reuters) - Spanish power groups could
breathe a sigh of relief before the end of the year if the first
stage of a plan to take 14.6 billion euros ($20.4 billion) of
government-backed debt known as the tariff deficit off their
balance sheets goes according to plan. [ID:nLDE69P259]

Following are some facts on the tariff deficit:

WHAT IS IT?

The accumulated difference between generating, distributing
and supplying electricity for regulated markets and the tariffs
for those markets fixed by the government since 2001.

The deficit covers unprofitable business areas such as
supplying islands with electricity and more recently, Spain's
huge renewable energy rollout.

Spain has promised to eliminate the shortfall between
consumer prices and generation costs by 2013 through a
combination of further deregulation, reduced subsidies for
renewable energy and higher tariffs for consumers. It has also
considered a windfall tax on cheap power from nuclear and large
hydro electric plants.